On the date of admission of a partner there was a balance of 45,000 in the account of machinery. It was found undervalued by 10%. The value of machinery will appear in the new Balance Sheet at:

The correct option is 50,000.

Step-by-step Explanation:

1. Understand the concept of undervaluation:
When an asset is said to be undervalued, it means that its recorded value in the books of accounts is less than its actual (true) value. In this case, the machinery is undervalued by 10%. This implies that the recorded book value of 45,000 represents only 90% (which is 100% - 10%) of the actual value of the machinery.

2. Formulate the algebraic equation:
Let the actual or true value of the machinery be represented by $X$.
Since the book value is 90% of the actual value, we can set up the following equation:
$90\%\times X=\mathrm{45,000}$

3. Calculate the actual value ($X$):
Express 90% as a decimal (0.90) to solve the equation:
$0.90\times X=\mathrm{45,000}$
Divide both sides of the equation by 0.90 to isolate $X$:
$X=\frac{\mathrm{45,000}}{0.90}$
$X=\mathrm{50,000}$

4. Accounting treatment:
On the admission of a new partner, the assets and liabilities of the firm are revalued to reflect their current true market values. Since the correct value of the machinery is determined to be 50,000, it will be recorded at this updated revalued amount in the new Balance Sheet.